New Survey: Federal Reserve Employees are “Demoralized,” “Distrustful” and “Afraid to Speak Out”

“We’re supposed to oversee a sprawling and complicated financial system and huge banks — all the while making sure we don’t implement policy that hurts the economy — and we can’t even properly manage ourselves,” said one Fed official who helps develop regulatory policy. “How can we be trusted to supervise the system when the Fed can barely supervise its own staff?”

My readers know that not only do I not trust the Federal Reserve, but I think it is one of the most dangerous and immoral institutions operating in America today. It’s not about particular individuals that I think need to be replaced (although Larry Summers will be an absolute nightmare), it is that I do not think any institution should ever have the power to credit unlimited currency and credit and distribute it at will to whoever they want with very little oversight. While I don’t write about the Fed as much as I used to, I suggest you go back and reread my 2011 article: Why Fiat Money is Immoral.

The Huffington Post article highlighted here is full of disturbing survey results, which without question demonstrate that the most powerful institution in the U.S. is completely dysfunctional. There are some other hidden nuggets in there as well. Such as this:

The Fed refused to make public a broader set of survey results that would allow for a comparison between the policy unit and other sections inside the banking supervision and regulation division.

Stier, whose group doesn’t have access to the Fed’s survey results because the law that calls for government employee surveys doesn’t apply to the Fed, said he was disappointed in the survey results. He praised the Fed for conducting the survey. “You can’t manage what you don’t measure,” he said.

Wait a minute. Why does the law the applies to government employee surveys not apply to the Fed? It is because the Federal Reserve is not a government agency but rather a private bank? You’d think the Huff Post would’ve dug into that bizarre angle a little deeper. Kind of important.

Or what about this:

Several top regulators at the Fed’s headquarters in Washington who helped combat the financial crisis have since left, many for lucrative positions either at leading banks or at consultancies that work for banks. Current regulators fear experienced staffers will continue to leave the Fed for the financial services industry, depriving the regulator of key experience as it finalizes several post-crisis measures and sets about gauging banks’ compliance with new rules.

Hey guys, thanks for all the bailouts, now come work for us. Shameless, disgusting, unacceptable.

More from the Huffington Post:

WASHINGTON — Regulators overseeing the nation’s largest financial institutions are distrustful of their bosses, afraid to speak out, and feeling isolated, according to a confidential survey this year of Federal Reserve employees.

The findings from the April survey of roughly 400 employees, presented to Fed staff during multiple meetings in June and July and obtained by The Huffington Post, show a workforce that is demoralized, and an institution where teamwork is nonexistent, innovation and creativity are discouraged and employees feel underutilized.

An overwhelming majority of Fed regulators are proud to work at the central bank and believe in its mission of supervising the financial system and ensuring stability. They also trust and have good relationships with their immediate supervisors. But most say that top leaders are failing the organization, in part by not communicating honestly, and that employees are in the wrong jobs, or are poorly managed.

About a third of workers surveyed in the policy unit agreed that it was “safe to speak up and constructively challenge things around here,” documents show.

“That tells me you don’t have the culture of debate and engagement that you need so that questions are asked,” said Angelides.

About a third of workers surveyed in the policy unit agreed that it was “safe to speak up and constructively challenge things around here,” documents show.

“That tells me you don’t have the culture of debate and engagement that you need so that questions are asked,” said Angelides.

Just about half, or 51 percent, of policy employees agreed with the statement: “I trust the senior leaders of this organization.” Fifty-six percent of the entire banking supervision and regulation division felt the same way.

Less than half of workers in the Fed policy unit agreed that the unit’s senior leaders “act in alignment with our organization’s core values or guiding principles.” Fewer than 40 percent said they are encouraged to be creative and innovative.

The banking supervision and regulation division failed to score above the benchmark in every category listed in the survey documents obtained by HuffPost. The benchmark wasn’t identified. The Fed refused to make public a broader set of survey results that would allow for a comparison between the policy unit and other sections inside the banking supervision and regulation division.

Nearly a dozen current and former Washington-based Fed employees corroborated the Fed survey results, some by offering personal examples of Fed regulators who had been marginalized after challenging senior leaders or pushed out over apparent personality conflicts. They all spoke to HuffPost on the condition of anonymity for fear of losing their jobs.

The Fed overall has added more than 400 people to implement Dodd-Frank, it said in a recent report to Congress. Congress mandated that the three federal banking agencies — the Fed, FDIC and OCC — write 135 rules to further reform the industry, though just 43 had been finalized as of July 15, according to Davis Polk & Wardwell.

Good thing all those extra employees made such a difference.

“We’re supposed to oversee a sprawling and complicated financial system and huge banks — all the while making sure we don’t implement policy that hurts the economy — and we can’t even properly manage ourselves,” said one Fed official who helps develop regulatory policy. “How can we be trusted to supervise the system when the Fed can barely supervise its own staff?”

Stier, whose group doesn’t have access to the Fed’s survey results because the law that calls for government employee surveys doesn’t apply to the Fed, said he was disappointed in the survey results. He praised the Fed for conducting the survey. “You can’t manage what you don’t measure,” he said.

Several top regulators at the Fed’s headquarters in Washington who helped combat the financial crisis have since left, many for lucrative positions either at leading banks or at consultancies that work for banks. Current regulators fear experienced staffers will continue to leave the Fed for the financial services industry, depriving the regulator of key experience as it finalizes several post-crisis measures and sets about gauging banks’ compliance with new rules.

“A lot of the experienced people who are not afraid to voice their opinion in a manner that’s not viewed as disrespectful have left the Fed, so you have a lot of inexperienced folks at the Fed who don’t know how to deal with sort of complex situations,” one former senior banking supervision and regulation division official said.

1 Comment

You deserve to be the first to know. The Federal Reserve Bank had a charter for 100 years from 1913 to 2013. Their charter is not going to be renewed. The new currency issued will be as Treasury Notes not Federal Reserve Notes.

What brought this about? The Dragon Family lawsuit for $1T. The Federal Reserve Banks (all 12) were liened in an amount that stopped them from being rechartered. They took the Dragon Family wealth and were supposed to pay annual fees on the Gold held in trust. They never paid a cent for over 50 Yrs. Now, they pay the price. What about the World Bank, the UN, The Bank of England and the Queen?